Rooftop solar projects hindered by cautious bank lending
June 12, 2014 Category Alternative energy, Environment
The installation volume of rooftop solar panels in China has fallen well short of expectations this year owing to the cautious attitude of banks in lending to the sector. This means the industry will have difficulty reaching the goal of 14 gigawatt (GW) of solar panel installations this year, Wang Jin, Director of the National Development and Reform Commission’s Institute of International Energy, said. However, activity is expected to pick up rapidly in the year’s second half, once issues worrying financiers and investors are resolved, since the central government is working hard on giving banks confidence to provide funding to project developers, Wang added. “Since this year is the maiden year that rooftop solar power projects are being commercialized on a big scale, it takes time to make adjustments to address some new issues,” he told a solar industry conference in Shanghai. He said less than 2 GW of rooftop panel installations has been completed so far this year, far short of the NEA’s full-year target of 8 GW. The NEA has also set an installation goal of 6 GW of ground-mounted solar farms that rely on power grid operators to buy all of their output. Ground-mounted projects used to dominate installations, but since China’s richest solar resource is located in its sparsely populated northern and western regions, rooftop installations in those areas are being encouraged to reduce the pressure on power grid operators to build infrastructure. The output of rooftop projects tends to be mostly absorbed locally, with excess output sold to the local power grid if they are grid-connected. Issues troubling financiers and investors include the lack of a guarantee, when a building’s ownership is transferred, of developers’ rights to operate solar farms they have installed. The industry is also lobbying for state-owned power distributors to act as collectors of power tariffs and take the risk of payment delinquencies in exchange for a return from rooftop projects, so that developers can be assured of stable revenues regardless of who owns or occupies the building. Another issue is the lack of insurance products to protect developers from lost power output due to adverse weather and equipment damage caused by accidents.
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